Endeavour Mining Plc · TSX:EDV
Endeavour Mining — Investec African Gold Conference 2020
42 slides from Endeavour Mining's conference presentation, July 2020
Slide 1: Investec African Golds Presentation
INVESTEC AFRICAN GOLDS PRESENTATION July, 2020 TSX:EDV
Slide 2: Disclaimer & Forward Looking Statements
DISCLAIMER & FORWARD LOOKING STATEMENTS Cash cost per ounce and all in sustaining cash cost per ounce are non GAAP performance measures Clinton Bennett, Endeavour's Vice President of Technical Services a Member of the Australasian with no standard meaning under IFRS This presentation contains “forwa
Slide 3: Endeavour Mining Overview
CORPORATE PRESENTATION ENDEAVOUR MINING OVERVIEW A premier diversified West African gold producer Top 15 Global GOLD PRODUCER +1Moz <$900/oz 2020 PRODUCTION TARGET 2020 AISC TARGET 10Moz 21Moz P&P RESERVES M&I RESOURCES 3
Slide 4: Table of Contents
TABLE OF CONTENTS 1 WHY WEST AFRICA? 2 ENDEAVOUR OVERVIEW Note : All amounts are in US$, except where indicated, and may differ from MD&A due to rounding
Slide 5: Why West Africa?
01 SECTION 1 WHY WEST AFRICA?
Slide 6: Countries of Operation
CORPORATE PRESENTATION COUNTRIES OF OPERATION Operate in 3 emerging market countries CÔTE D’IVOIRE BURKINA FASO MALI › Population: 27.5m › Population: 20.8m › Population: 19.5m › Unemployment Rate: 2.5% › Unemployment Rate: 6.15% › Unemployment Rate: 7.9% › Literacy: 47.2% › Literacy: 41.2% › Litera
Slide 7: West Africa Operates as an Economic Union
CORPORATE PRESENTATION WEST AFRICA OPERATES AS AN ECONOMIC UNION Single currency with economies becoming more integrated Countries using West African CFA INSIGHTS › West Africa acts as an economic zone (WAEMU) › Common central bank for 8 states › Common currency which is pegged to the Euro › Fiscal
Slide 8: West Africa's Economy Is Growing Quickly
CORPORATE PRESENTATION WEST AFRICA’S ECONOMY IS GROWING QUICKLY Strong involvement from the World Bank Group INSIGHTS Long-term real GDP forecasts (2019-2024)(% p.a.)1 › Côte d’Ivoire economy has expanded 6.9% by an average of 8% per year since 2011, making it one of the fastest 6.0% growing countri
Slide 9: West Africa Mining Codes Are Well Aligned
CORPORATE PRESENTATION WEST AFRICA MINING CODES ARE WELL ALIGNED Very similar to developed countries INSIGHTS Corporate Income Tax and Royalties › Transfer pricing regulations recently Country / Region Corporate Tax Mining Royalties established in the jurisdiction Burkina Faso Up to 27.5% Up to 5% ›
Slide 10: Significant Exploration Efforts in West Africa
CORPORATE PRESENTATION SIGNIFICANT EXPLORATION EFFORTS IN WEST AFRICA Endeavour represents over 10% of total West African spend Exploration budget ($m) 677 634 +$ 5 billion spent in West Africa over 385 last 10 years 363 247 176 175 173 137 123 113 110 100 77 75 74 71 47 10% of global budget is spen
Slide 11: Significant West-Africa Exploration Success
CORPORATE PRESENTATION SIGNIFICANT WEST-AFRICA EXPLORATION SUCCESS Top ranking region for discoveries over past 10 years Discoveries by area For the period between 2006-2016 +79Moz 79Moz Discovered over past 10 years in West Africa 50Moz 42Moz 33Moz No.1 27Moz 27Moz 23Moz 22Moz 20Moz 18Moz 16Moz 16M
Slide 12: Significant Exploration Efforts in West Africa
CORPORATE PRESENTATION SIGNIFICANT EXPLORATION EFFORTS IN WEST AFRICA More exploration expenditures in a region that is 5x smaller Land mass compared to exploration spend 900 800 700 2017 exploration budget ($m) Canada Australia 600 500 400 West Africa More spending, yet 5x smaller land mass USA 300
Slide 13: Burkina Faso & Cote d'Ivoire Are Under-Explored
CORPORATE PRESENTATION BURKINA FASO & COTE D’IVOIRE ARE UNDER-EXPLORED Host ~60% of belt yet represents ~25% of production % of Birimian greenstone belt West African geology - Birimian greenstone belt Burkina Faso 22% Côte d’Ivoire 35% Karma Other 14% Houndé Mana Kalana Mali Boungou Ghana Nabanga 10
Slide 14: Burkina Faso & Cote d'Ivoire Are Fast Growing
CORPORATE PRESENTATION BURKINA FASO & COTE D’IVOIRE ARE FAST GROWING Represent half of the region's exploration expenditures West African exploration expenditures by country 2017 exploration expenditures Côte d’Ivoire 20% ~50% Burkina Faso of West African exploration 29% expenditures Ghana Other Cou
Slide 15: Strong Production Growth in West Africa
CORPORATE PRESENTATION STRONG PRODUCTION GROWTH IN WEST AFRICA Has quickly become a top producing gold region Gold production by country 15Moz +81% West African production growth over past 9Moz 9Moz 15 years 8Moz 7Moz 5Moz 5Moz 5Moz 4Moz 3Moz 3Moz 3Moz 4th largest gold producing South Africa Austral
Slide 16: Endeavour Is Emerging as the Leading Multi-Asset West African Producer
CORPORATE PRESENTATION ENDEAVOUR IS EMERGING AS THE LEADING MULTI-ASSET WEST AFRICAN PRODUCER Operating Mines # Countries of operations # West Rest of Rest of the West Rest of Rest of the Africa Africa World Africa Africa World Geographically focused yet diversified across multiple mines and multipl
Slide 17: Making a Difference Where We Operate
CORPORATE PRESENTATION MAKING A DIFFERENCE WHERE WE OPERATE Operating in a responsible manner 1 No. 1 PRODUCER CÔTE D’IVOIRE & BURKINA FASO1 1 No. 1 EMPLOYER IN BURKINA FASO1 All information sourced from 2019 Sustainability report 1. As of July1, 2020 post SEMAFO acquisition 17
Slide 18: Focused on Growing Local Talent
CORPORATE PRESENTATION FOCUSED ON GROWING LOCAL TALENT Over 95% of our workforce are nationals Employee breakdown(1) Expats Nationals GENERAL MANAGERS 75% 95% site workforce 3 out of 4 are West-African are nationals 0% 25% in 2017 in 2018 SITE WORKFORCE HEAD OF DEPARTMENTS 95% 42% 75% 2,327 out of 2
Slide 19: Endeavour Overview
02 SECTION 2 ENDEAVOUR OVERVIEW
Slide 20: Company Profile
CORPORATE PRESENTATION COMPANY PROFILE Shareholder Distribution Ticker TSX:EDV Shares Outstanding as at Jul 3 163m RETAIL LA MANCHA MANAGEMENT INSTITUTIONAL Share price as at July 06 C$33.00 Europe Market cap as at July 06 US$3.9B Net Debt as at March 31 (PF with Semafo) US$406m Other North America
Slide 21: Create a Premier Diversified West African Gold Producer
CORPORATE PRESENTATION CREATE A PREMIER DIVERSIFIED WEST AFRICAN GOLD PRODUCER STRATEGIC OBJECTIVES STRATEGIC PILLARS <$850/oz Diversification All-in Sustaining Cost across multiple countries and mines +10 YEARS Production visibility +20% ROCE from operating assets with strong capital allocation dis
Slide 22: Strategically Repositioned
CORPORATE PRESENTATION STRATEGICALLY REPOSITIONED Strategically repositioned Endeavour as a leading African Gold producer 2016 - 2019 TURN-AROUND 2015 PROFILE $1billion invested 2020 PROFILE All-in Sustaining $922/oz 2 flagship mines built <$900/oz Cost 6.3Moz discovered at $12/oz 4 years 10+ years
Slide 23: Production and AISC Profile
CORPORATE PRESENTATION PRODUCTION AND AISC PROFILE Focused on long-term sustainable production at low cost FOCUSED ON BUILDING HOUNDÉ AND ITY CASHFLOW PHASE +1Moz +1Moz +1Moz 727koz 663koz 651koz 593koz 516koz $922/oz $886/oz $866/oz $843/oz <$900/oz $818/oz 2015 2016 2017 2018 2019 2020 2021 2022 2
Slide 24: Creation of a Top Gold Producer
CORPORATE PRESENTATION CREATION OF A TOP 15 GOLD PRODUCER Largest West African Gold producer Industry Top Producers (Moz) Based on latest reported fiscal year gold production, unless otherwise stated 1 Top 15 6.5 6.0 5.5 Global gold producer 2.5 2.0 1.5 1.0 0.5 0.0 1.0Moz Polymetal3 AngloGold Centam
Slide 25: AISC in the Bottom Third of the Global Cost Curve
CORPORATE PRESENTATION AISC IN THE BOTTOM THIRD OF THE GLOBAL COST CURVE Focused on long-term sustainable production at low cost Cumulative Industry AISC Cost Curve ($/oz) Industry curve based on Q4-2019 US$/oz 3,500 LOW COST 3,000 Gold producer 2,500 2,000 1,500 Endeavour 1,000 500 Bottom third Ind
Slide 26: Operational Excellence
CORPORATE PRESENTATION OPERATIONAL EXCELLENCE 1 Hands-on management model with teams close to operations Senior Management Sebastien de Montessus CEO & Director SENEGAL 2h40 Benoit Desormeaux GAMBIA MALI Karma President Mine BURKINA Ouagadougou FASO GUINEA- Mana Henri de Joux Bamako BISSAU Mine Boun
Slide 27: Safety Is Our Top Priority
CORPORATE PRESENTATION OPERATIONAL EXCELLENCE 1 Safety is our top priority Lost Time Injury Frequency Rate(1) (on a rolling 12-months basis) 0.66 0.26 LTM Lost Time Injury Frequency Rate 0.40 0.29 0.26 0.16 0.12 2 LTI Over the past 12 months Peer Average(2) FY2016 FY2017 FY2018 FY2019 Q1-2020 Traili
Slide 28: Project Development
CEO CORPORATE INTRODUCTION PRESENTATION PROJECT DEVELOPMENT 2 Strong construction track record MOST RECENT MINE BUILDS COMPLETION NZEMA, GHANA, BUILT IN 2010 AGBAOU, CÔTE D’IVOIRE, BUILT IN 2014 ON-SCHEDULE HOUNDÉ, BURKINA FASO, BUILT IN 2017 ITY CIL, CÔTE D’IVOIRE, BUILT IN 2019 ON-BUDGET 0 LTIs 28
Slide 29: Project Development
CORPORATE PRESENTATION 4 442 PROJECT DEVELOPMENT Potential to increase capital allocation efficiency with enhanced pipeline Daoukro Cluster (Ivory Coast) Kofi Trend Bondoukou Clust. (Mali) (Ivory Coast) Nabanga (Burkina Faso) PEA completed 2019 Ity CIL Fougadian Siguiri Boungou (Mali) (Guinea) Kalan
Slide 30: Project Development
CORPORATE PRESENTATION PROJECT DEVELOPMENT 2 Attractive organic growth opportunities INSIGHTS › While the main focus for 2020 is cash flow generation, Endeavour is also continuing to build optionality within NAME Kalana Fetekro Bantou Nabanga its portfolio by advancing studies and conducting explora
Slide 31: Unlock Exploration Value
CORPORATE PRESENTATION UNLOCK EXPLORATION VALUE 3 Strong foothold in two world-class belts Hounde Belt, Burkina Faso Ity Belt, Côte d'Ivoire 31
Slide 32: Unlock Exploration Value
CORPORATE PRESENTATION UNLOCK EXPLORATION VALUE 3 Among largest and most promising portfolios in West Africa West African geology - Birimian greenstone belt Karma AMONGST LARGEST TENEMENT HOLDING Houndé Mana Kalana Boungou Nabanga Bantou +200 EXPLORATION TARGETS Fetekro Ity Agbaou 21Moz 10-15Moz Com
Slide 33: Unlock Exploration Value
CORPORATE PRESENTATION UNLOCK EXPLORATION VALUE 3 Starting to deliver against our 5-year strategy Indicated discovery target by area as published in Nov. 2016 Excludes SEMAFO Assets 4.0-6.0Moz 4.0-6.0Moz 10-15Moz 5-year Indicated Resource discovery target 2.5-3.5Moz (Assessment underway to include S
Slide 34: Unlock Exploration Value
CORPORATE PRESENTATION UNLOCK EXPLORATION VALUE 3 On track to meet 5-year exploration targets Total Indicated discoveries and targets Excludes SEMAFO Assets Indicated resources discovered Indicated resources targeted % Cumulative Indicated resources against 5-year discovery target Exploration spend
Slide 35: Unlock Exploration Value: Ity Mine
CORPORATE PRESENTATION UNLOCK EXPLORATION VALUE 3 Exploration demonstrates potential for +250koz for 10 years at Ity Mine Ity production plan (As per 2017 Optimized Study (2), based on 4Mtpa plant and excludes Le Plaque discovery) 0.5Moz of total reserve additions required Production as per study Le
Slide 36: Unlock Exploration Value: Houndé Mine
CORPORATE PRESENTATION UNLOCK EXPLORATION VALUE 3 Exploration demonstrates potential for +250koz for 10 years at Houndé Mine Houndé production plan (As per 2016 Optimized Study(2), excludes Kari Pump discovery) 1.1Moz of total reserve additions required Production as per study Kari Pump, Kari West a
Slide 37: Portfolio & Balance Sheet Management
CORPORATE PRESENTATION 4 PORTFOLIO 44 & BALANCE SHEET MANAGEMENT 4 Potential to continue to pursue our active portfolio management strategy Portfolio Management Insights Combined Entity Producing Portfolio1 AISC, $/oz Tabakoto › Ity HL acquired through strategic partnership with La Mancha in (sold i
Slide 38: Portfolio & Balance Sheet Management
CORPORATE PRESENTATION PORTFOLIO & BALANCE SHEET MANAGEMENT 4 Continued strong cash flow following completion of investment phase Net Cash Flow Net cash flow before repayment/proceeds of long-term debt, convertible bond and equipment finance obligation Net Cashflow Cummulative Cashflow ITY CIL CONST
Slide 39: Portfolio & Balance Sheet Management
CORPORATE PRESENTATION PORTFOLIO & BALANCE SHEET MANAGEMENT 4 Sustained cash flow profile and sound balance sheet Available sources of liquidity 2020E Consensus FCF Yield As at March 31, 2020 16% FCF Yield realized for Q1- 2020 annualized Represents CAD 51/share 11% 11% 12% 10% 7% 8% 7% 7% $354m 5%
Slide 40: Portfolio & Balance Sheet Management
CORPORATE PRESENTATION PORTFOLIO & BALANCE SHEET MANAGEMENT 4 Attractive returns following investment phases Return on Capital Employed (ROCE) (1) SEMAFO ENDEAVOUR 13% 14% for H2-2019 10% 11% Combined 2019 ROCE annualized 6% 6% 1% 1% +20% ROCE target with strong capital allocation discipline 2017A 2
Slide 41: Pro Forma Group Metrics
CORPORATE PRESENTATION PRO FORMA GROUP METRICS Creation of a +1Moz, low AISC producer with strong balance sheet Q1-2020 Q1-ANNUALIZED PRODUCTION 254koz +1.0Moz ALL-IN SUSTAINING $896/oz <$900/oz COST OPERATING Approx. $187m CASH FLOW $750m NET DEBT / LTM ADJ. Close to 0x 0.5x EBITDA by year-end Note
Slide 42: Investment Proposition
CORPORATE PRESENTATION INVESTMENT PROPOSITION Exposure to strong fundamentals and with upside potential STRONG FUNDAMENTALS › High quality asset base generating strong free cash flow yield › Capital allocation discipline with >20% ROCE target › Strong organic growth potential Immediate ATTRACTIVE VA
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